Dispute-hit Mundra LNG terminal to be commissioned by Dec: Report

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More than a year since its inauguration, Gujarat government-backed LNG project at Mundra, built at an estimated cost of Rs 5,500 crore, may finally get commissioned by December, according to sources.

A commercial dispute between the partners Gujarat State Petroleum Corp (GSPC) and Adani Group had stalled commissioning of the 5 million tonnes a year liquefied natural gas (LNG) import facility, they said.

The terminal was mechanically completed in mid-2018 and was inaugurated by Prime Minister Narendra Modi.

However, the commissioning has been stalled due to delay in finalisation of certain lease and sub-commission agreements between the promoters and the Gujarat government.

A commissioning cargo from the US had arrived at Mundra LNG terminal last November, but it had to be diverted to Hazira after it was not allowed to discharge at Mundra, sources said.

Disputes between promoters include GSPC's refusal to compensate Adani for money spent on port development, including dredging costs of Rs 1,200 crore, yearly fees payable to the Gujarat Maritime Board and a yearly Rs 65-crore lease for land used by the LNG terminal within Adani-controlled Mundra Port.

GSPC and other state sector entities hold 50 per cent equity in GSPC LNG - the company that built the terminal. Adani Group holds 25 per cent in the firm, while the balance has been earmarked for strategic investors/fuel supplier/financial institutions/public.

Mundra will be the third import terminal in Gujarat to import super-cooled natural gas (liquefied natural gas) in cryogenic ships and then re-converting the liquid fuel into its gaseous state before transporting it by pipelines to customers.

GSPL LNG, a GSPC group firm that is implementing the project in partnership with Adani Group, will look at inducting a strategic partner like Indian Oil Corp (IOC) once the terminal is fully operational, they said.

The terminal will operate at 1.5 million tonnes a year capacity for the first one-and-a-half years before scaling up to full capacity.

The Mundra terminal, whose capacity will be expandable to 10 million tonnes per annum in the future, is designed to have a berth for receiving LNG tankers of sizes 75,000 cubic metres to 2,60,000 cubic metres, two LNG storage tanks of capacity 1,60,000 cubic metres each, facilities for regasification and gas evacuation.

Gujarat already has a 17.5-million-tonnes-a-year import facility operated by Petronet LNG at Dahej and another 5-million-tonnes-terminal at Hazira that is run by Shell.

Besides, Dahej and Hazira, India currently has two more LNG terminals - Dabhol in Maharashtra and Kochi in Kerala, both with 5-million-tonnes-a-year capacity. More import terminals are planned on the east coast as well as on the west to meet the fast-growing energy needs of the country.

The R-LNG from the Mundra terminal shall be evacuated by the 67 km Mundra-Anjar Natural Gas transmission pipeline being developed by Gujarat State Petronet Limited (GSPL). The Mundra-Anjar pipeline further connects to the existing Gujarat State Petronet Limited (GSPL) Gas Grid.

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